How Price-Quality Judgments Differ across Cultures

Consumers with a more interdependent (vs. independent) cultural self-construal tend to think more holistically about the inter-relationship among product elements and therefore are more likely to use price information to judge quality.

It is a “marketing universal” that price information influences consumers’ product quality perceptions, and Ashok Lalwani and Sharon Shavitt offer the first findings that these judgments are moderated by cultural differences.

In a series of studies, they found that consumers from less individualistic cultures (i.e., South and East Asia) have a greater tendency to use price information to judge the quality of products as diverse as paper towels, shaving cream, hand soap, bicycles, and watches. Their analysis suggests that this tendency is associated with a more holistic thinking style, where people are more likely to see things as interconnected and to find relationships between various product attributes.

Less individualistic consumers rely more on price to judge quality – an important consideration for marketers of luxury and other premium products.

Consumers from more individualistic cultures (i.e., North America and Western societies) demonstrate an analytic thinking style and tend to focus on separating and distinguishing between product attributes. While they use price to make quality judgments, they do so to a lesser degree.

Lalwani and Shavitt also found that boundary conditions facilitate or constrain the role of holistic thinking style. For example, when the product category facilitates symbolic connections or when the measure of quality is very broad, both individualistic and less-individualistic consumers are more prone to using price to infer quality.

These findings help to identify viable target markets for companies with higher prices, particularly where brands compete on the basis of quality. Furthermore, marketers could enhance consumers’ acceptance for higher-priced brands by encouraging holistic thinking during brand exposure (e.g., by running ads that invite consumers to identify connections or patterns in a larger picture).